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Is Travelling Overrated?

These days, if you spend any time on most personal finance blogs, one of the author’s main goals in life is spending less money on stuff and more money travelling. Some are even trying to take it to another level, by either making enough money on their blogs to be able to travel all the time, or regaling us with their tales of travel gone past. Look at all the countries they’ve been to. They’ve really experienced life, since they’ve eaten shredded monkey meat in some some obscure part of Turkmenistan.

How before everyone gets upset at my ragging on travelers, I’ll back up a bit. One of my personal goals in 2012 is to travel more. I want to use up all my holidays from work, as well as going on some random weekend road trips. I don’t care if I have to do it by myself, I want to get out and see what this world has to offer. I’ve taken a few big trips over the years, and I don’t regret a single penny spent.

But, not all of you should be focusing on traveling. In fact, for probably a majority of the people reading this, it’s a bad idea. Here’s why:

You Don’t Have The Money

If I had a nickel for every person who went on an exotic holiday and financed it, I’d have enough to fund the sequel to Dude Where’s My Car. All sorts of people drown in debt, feel bad about their financial situation, and then feel like they deserve a holiday to get away from it all. So they hop on a plane and spend a week or two in the sun, coming back to even more debt.

But wait, you say, I’m not one of those people. I don’t have any debt, (except student loans/mortgages) so I can afford to go. Okay, congratulations on that, but have you fully funded your emergency fund? Are you contributing at least 10% of your gross income to retirement accounts? Are you saving for your future goals? If the answer to any of those questions is no, maybe it’s time to reconsider the vacation.

Too many people shoot their future selves in the foot by spending foolishly in their younger years. I’m not saying you should be a homebody who never goes anywhere. I just think you should have the rest of your financial house in order before you start to travel. And whatever you do, don’t finance it.

Buy Assets Instead

Instead of travelling, perhaps that money would be best spent on assets that produce monthly cash flows. You could buy several dividend paying stocks, each of which will spin off income each and every quarter. Or, you could save up and use your extra cash on the down payment on a rental property. Heck, if you’re in the blogging business, you could use your savings to buy another blog and further expand your online empire.

And, if you repeat the process of buying assets enough time, eventually you’ll have enough sideline income to completely fund your travelling habit. Once you get your finances in better shape, traveling will become that much easier to afford.

Or, if you’re sitting on piles of so called ‘good’ debt, perhaps it’d be more prudent to pay down your mortgage or start getting serious about those student loans. Yeah, interest rates are low now, but they won’t be forever. And once you pay those suckers off completely, you get a few hundred bucks a month extra in cash flow, to put wherever you want.

By taking care of your financial house in your 20s, you can open up all sorts of possibilities in your 30s. That vacation you planned because you paid off your student loans is just a little sweeter than a plain old one.

You Should Stay At Work

Many 20-somethings dream of taking an extended time off work to travel the world. Some will actually do it, either taking a sabbatical or actually quitting their jobs. But, is this the best move for their careers?

For some people, staying at work is a much smarter idea. Maybe a promotion comes available right after you leave for the big trip. Or, maybe when you come back, your industry has gone down and jobs are hard to find. No matter what the travel lovers tell you, not every hiring manager is impressed by an around the world trip.

Get Your Financial House In Order First

Here’s what you need to do. Pay off your debts. Fund your retirement accounts. And start buying assets that will be the building blocks towards future wealth. Then, once you’ve put yourself on the right path, feel free to travel. Traveling is pretty cool. Financial independence is even cooler. Get all your financial stuff in order to make that vacation even better. Your future self will thank you. Traveling is really cool.

Me too. I used to travel regardless whether I had the money. Now I travel with it paid for ahead of time. It is a much better situation. Like you, I love to travel but it isn’t worth having money stress over.

I’m an entrepreneur who is 24 years old. I will be taking off to travel abroad for 6 weeks for the second straight year. While I am away, my business will be running as it does when I am home. The only difference is that I will be spending less time on future development. My apartment is rented at a profit for the duration I’m gone. And traveling to South East Asia, I’ll be quite possibly spending less than I would home in Los Angeles. So..I think I’m at least living proof that you can’t discount what those people are saying after all. Take that for some food for thought!

If you can’t afford it, don’t go into more debt to escape. If you do the right things and can afford it, I say travel as far and wide as you can! Life is about experiences as much as it is about setting yourself up. An opportunity missed is an opportunity lost, don’t miss out on them all but be smart about how you do it.

I’m all about buying assets… But I pretty disregarded most of your post after reading that you would fund a sequel to Dude Where’s My Car?

In all seriousness you’re definitely right. I have so many friends that have decided to work for a year, and then spend all that money, plus go in debt, in order to see Europe for 6 months. Whenever I check in with them they are drunk or hung over and I think… Canadian whiskey couldn’t get you drunk properly or? I think along the same lines in that when I’m 45 and own assets, I can spend all year in Europe, and I might have the life experience to actually appreciate it.

I don’t know if I feel traveling is overrated as much as I feel that the financial impact is understated. I love traveling. I do agree that one definitely should hit financial goals and not finance the trip. Unfortunately, that’s not how everyone operates. I agree purchasing income-producing assets should be one of those goals too. I just don’t want to discount the value of traveling simply because there are other important things competing for those same dollars.

I find it hard to justify putting off travel for later for just about any reason. I’m always concerned I won’t get the same chances later on in life, and I’m almost certain it will be an entirely different experience if I wait til I retire.

That said, I would consider myself a responsible traveler. I try to keep costs down by not staying at the most expensive hotels or eating the most expensive foods. Going on vacation isn’t about spending a ton of money to reward myself for my hard work.

I totally agree with this – I sometimes think that people get blinded by the guiding light of travel, and a lot of readers miss the point. Lots of bloggers get their finances right to do what they want to do, and for a lot of those people, it happens to be traveling. It does not HAVE to be travelling though – it can be anything YOU enjoy, like collecting bugs.
Back in my dumber financial days, I did finance a trip. It took too long to pay off.

I have to disagree with you. While yes it’s true, that destitute people shouldn’t travel, I think as long as you’re on solid financial footing and if you save up for your vacation, people should take advantage and travel. We are saving for a honeymoon (we’ve been married almost two years). By the time we go on our trip, we will have no credit card debt, some in our emergency fund, but we will still have about $20,000 in student loan debt. Could we put the money from our travel savings to pay off our student loan debt faster? Yes. But it would take a few more years to pay off the student loan debt. By the time we pay that off, we’ll have to save for a house. After we save for a house, we’ll have to save for furniture…and the list goes on and on and on. By your calculations, only wealthy people would be able to travel because for middle-class people there is ALWAYS something else that travel money could go toward. We are finding extra ways to make money and save money so that we can afford to go on a trip and not affect our bottom line. That’s as responsible as I want to get without having to forgo my dreams of traveling.

I love travelling. It is, quite possibly, my biggest vice. And to me, travelling teaches you so much about the wold around you and yourself. Would I be in a better financial position had I not backpacked for almost 8 months through Europe and Asia? Yes. Do I regret it? Heck No.

I’m a traveler and I actually view it as a top priority in my life, right up there with debt freedom. Even though our big trip this year comes right before “debt freedom (except house)” I haven’t taken a big trip in almost 3 years and I may not have a chance for a few more if I don’t go this summer.

To do it responsibly, I’ve been saving in advance, and combined with tax return and cash flow, should/will be able to do it without accruing any debt.

1) I agree with you regarding my argument/attempt at humor. I suppose I have been fortunate that many of the older people in my life have been on relatively firm financial footings, and that in itself probably skews my perspective.

When I first read somewhere that Flaubert (one of my favourite writers) hated trains I thought it is because they were noisy and dirty. Not at all! He said that trains will only make it easier for people to get together and be silly together.

Having said that, I do travel regularly and generally enjoy seeing new places, meeting new people and comprehending different cultural conventions.

The one who wrote Madame Bovary (a very studied and very boring book). I have the feeling that you will like Santimental Education and Bouvard et Pecuchet. Yes, he is not simply recognised to be one of the greatest Western novelists but also was a great, grumpy character who didn’t have much faith in universal human wisdom.

Traveling can be great but taking that 4k vacation to China may be a tad expensive. I think may people would like to travel more but tend to forget the great opportunities that are available to them right at home.

Oh sorry to defer here. I am a big travel fun. The more you travel better you become. Not talking about going to Las Vegas..but yes, going to Hawaii, Alaska..I learned a lot with respect to geography people and culture.

Such a timely post considering I’ve just returned from my weekend getaway! I agree that you need to be financially stable before traveling, but I’ve also made mistakes in the past in terms of up & leaving without the best financial footing. Now, I don’t even consider a trip without first consulting my budget and making sure I can pay for said trip before leaving!

I don’t think I’m going to look back on my life and think “I should have spent more time at work.” That said, I totally agree that the worst trip to take is the one that’s on a credit card that you can’t pay off right away.

People naturally regret what they didn’t do. At what point can you really afford to travel? Is it once you’ve paid off your consumer debt? Or does someone need to be a little further along in their path?

Much of the travel I’ve done around the world has been on the company dime. I don’t think we’ve ever financed any of our own vacations though. To paraphrase the old saw (and apart from hard assets) if you have to charge it, you can’t afford it.
Pretty sure there’s no monkeys in Turkmenistan. Shredded donkey meat, perhaps?

I absolutely agree. You can have a lot of fun taking inexpensive vacations in your 20s. Camping, hiking, biking, kayaking, etc. provide great adventures for relatively little money. More expensive travel will still be there when you have your financial house in order. I can’t believe people borrow money for a trip!!!

I love your quote. Yes, life is too short and it is meant to be lived. I am all for being financially responsible but to me money is a tool to enjoy life. I love traveling and it does teach you more than you can imagine.

What if you have your act together? I max out my retirement savings, no debt except for a small mortgage and I have a lot of vacation (I am a teacher). I also use every device to get a lot for my money. I use frequent flier miles and hotel awards.

SUH-WEET. A Dude Where’s My Car reference. Traveling should be done when you are younger, your experience will be more enjoyable. But if you take on debt, like you said, recipe for disaster for your future self.

I have never done the around-the-world trip, and don’t have the funds to take off a year to do that ATM, but I have been to a few off-the-beaten-track places like South Korea for a student exchange, Ethiopia, and Vietnam. I would definitely say that these experiences were all worth the few thousands that I have paid for them.

I agree. I have traveled a lot and I continue to do so and to me it is well worth the money. I am all for investing and saving but you also have to live too. As long as you don’t go into debt doing it, then fly away.

We took international trips every year for about 12 years. We didn’t have any consumer debt and we could afford those trips. We had a great time on those trips, but now that we have a kid, we’ll probably settle down a bit and travel in the US more.
Traveling broaden your senses and I think it is a better investment than buying dividend stocks. As long as you can afford it, that is.

I totally agree Joe. If you can afford it, traveling is well worth the money. You get memories and experiences from it that I would say are priceless. My hubby and I are doing similar to you and traveling every year until we have kids. It is a blast.

I understand your points, and they’re very valid. I disagree with a couple of them, though. I think you should do as much as you can when you’re young and healthy. Those experiences will be with you for the rest of your life. And you may not be able to take advantage of these experiences once you’re retired. That being said, you don’t have to go to Europe twice a year….even just taking a weekend getaway a few hours away from home can be enough to get your happiness swag back.

Well said. I agree. You can’t take things for granted. You need to do them now while you can. However, causing yourself financial strain isn’t good either which is why you need to find balance with the two.

Wow, who knew that a post about travel would spark such awesome debate? I found everyone’s comments just as eye-opening as the article, and I can see both sides of the issue. We don’t travel unless it is completely paid for, including anticipated expenses that might pop up. However, considering that we are self-employed, it does make it trickier to take much time off, because we still have to manage our business.

I now travel several times a year (fully paid for in advance), but when I was in my 20s, I would travel once in February–down to Mexico for a week and then spend the rest of the year paying it off on a line of credit. The interest wasn’t much considering the amount of enjoyment I received from my annual getaway.

Now I jaunt for a week overseas, to the Caribbean, or the Southern US, about 4 times year. What I never could understand are the people who insist that they MUST go to Europe for at least 3 months or more. That’s insanely expensive!! Better to see one place for a short period, then decide whether you’d return later. What the long-term travellers won’t tell you is they get “churched-out” after one week in Europe. …The ABC’s–Another Bloody Church, Another Bloody Castle. Short visits make you appreciate the surroundings a lot more!

I don’t know Ed. For me, I would love to travel for months at a time. Live somewhere for a while and really get to know the place. That’s just me though. Glad to hear you have found a way to travel without breaking the bank.

at the risk of being one of those “regaling us with their tales of travel gone past. Look at all the countries they’ve been to. They’ve really experienced life, since they’ve eaten shredded monkey meat in some some obscure part of Turkmenistan.” my take on travel is a bit more positive, which as it happens I published on my blog the other day.

By all means one should be financially stable first and debt free. You’ll also be best served avoiding the Travel Industry and doing it while you are young and able to handle the discomforts that come with getting there and moving about.

While I’ve missed the shredded monkey meat, I have had Guinea Pig in Ecuador. Tastes like rat. Maybe it’s time to book a flight to Turkmenistan.

I agree. We do have to seize certain opportunities while we are young and have the health etc. This is why my husband and I have made traveling such a priority right now. We have the freedom to do it and it would be silly to waste that opportunity.

It’a tough call and of course a personal choice. There are some who say, travel while you’re young and healthy, and others who say that debt is bad and you should save, save, save so you can have a good standard of living when you’re older. I tend to believe that you should experience some of the world. You do only live once (which is a terrible rationalization, I know) and I’d hate to be in a bed when I’m older thinking, “if I wasn’t so cheap when I was younger I would have seen some of the world.” It’s a tough call. I think going back to the same destination every year would be waste, but I think there is value to see and experience new things in life.

I enjoy traveling, but I always wanted people to expand on “you learn so much.” Do they mean they learn so much about the culture and the people that reside there? Do they mean they now know that they can survive in a foreign country alone?

I could really care less about world trek travelers, maybe because I only want to see a handful of countries and cities before I die, but every time I come across a blog (not including yours) about someone and their travels I always think to myself “if they EVER go back home what will they take back to their community without being cliche? What do they have to offer besides their memories and anecdotal stories about ‘expanding their mind’?”

Thought provoking question! For me, being a world traveler myself, I find I learn a lot about myself, literally. I learn more about how I react to certain situations, how I interact with people that I don’t know, what I am willing to try and not try (where are my personal limits?). I also learn about my own perspective on what matters in life and what really is important and it often has turned out to be different than what I initially thought. Traveling for me grounds me. It brings me back to the basics and the purity of life and an existence. It allows me to see myself outside of myself and gather insight from that. I can honestly say I don’t think I would be the person I am now without the travels I have had.

I think traveling is a great activity, as long as you can pay for your trip with the dollars in your bank account (not your credit card). It expands your worldview and opens your eyes in ways that are life-changing.

I became interested in personal finance BECAUSE of travel. I never had a shred of interest in personal finance prior to my globetrotting years. But the dual experience of needing to budget for the trip, AND also being on the trip and seeing stark poverty around the world, made me realize how important money is.

That sounds like an obvious statement — “money is important!” — but I needed to fly to Cambodia in order to understand that concept.

I am the same way Paula. Travel has taught me so much and really expanded my views in everything, including finances. When we were in Africa earlier this year we learned how precious money and freedom really is.

I am a huge traveler myself and I really learn a lot. However I don’t think people should travel if they can’t afford it or don’t have other things in place first. It really is a luxury and you have to treat it that way.

Great arguments, I totally agree you should never travel if you don’t have the cash to pay for it. But allow my to be devils advocate for a moment. I’m told it’s not the things you do, but the things you don’t do that you regret the most at the end of your life. Perhaps waiting until every financial piece of the puzzle is perfectly in place is a recipe for never going anywhere.

I was one of those that decided to leave my job immediately after being offered a promotion and small raise. I realized it wasn’t for me and I wanted a course correction.

I also love to travel and backpacked all years in 2012. I believe in living the life you dreamed of by being money savvy. Like you said, you don’t go taking on debt to escape your situation only to return to it with more debt.

I do agree with you to know if you can afford the lifestyle you dream of and if you cant right now then figure out how you’ll be able to. That may mean staying at that job and focusing on career for a few years.

When he was just a kid and wanted to get as far FROM Texas as he could, my father figured out that the way to travel is to get a job that moves you overseas. He joined the Navy, then spent WW II in the Merchant Marine, and shortly thereafter got a job as a harbor pilot in Saudi Arabia. We lived there 10 years and had many opportunities to see the Middle East, Europe, and the USA — largely on the company’s dime.

If you really want to see the world, the trick is to find work that will allow you and your family to live overseas.

And yeah…after 10 years of traveling and another 20 with a guy whose idea of a good time was to get on a 747, I’d say it indeed is overrated.